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The newly elected
Chamber of Deputies of the Parliament of the Czech Republic sat down for its
first session on Monday, November 25. Although a formal coalition deal has not
yet been struck, three parties will probably govern the country together – the
Social Democrats, the Christian Democrats and the political movement ANO
("Yes"), led by the second-richest man in the country Andrej Babis
whom The Economist already labelled
“Central Europe’s Berlusconi”.

Being the winner of
the general elections, the Social Democrats (CSSD) should potentially have the
strongest position in forming a new coalition government. However, despite
aspiring to gain 30 percent of the overall vote, the party only took 21 percent,
with Babis’s ANO closely behind with 19 percent of the vote. The result gave
CSSD fifty seats – only three more than ANO’s forty-seven. Furthermore, the
Social Democrat’s position was somewhat weakened due to internal party power
struggles.

As was already obvious
prior
to the October elections, CSSD members were slowly beginning to split into
two factions – those supporting party leader Bohuslav Sobotka and those aiming
to strengthen the party’s ties with President Milos Zeman. The very evening of
the election, as votes were being counted and it was becoming obvious that CSSD
would not reach the desired 30 percent, first deputy chairman of CSSD Michal
Hasek and four high-ranking party officials from the party visited President
Zeman without the knowledge of party chief Sobotka. Allegedly, Hasek and his
colleagues met with Zeman to arrange details of post-election coalition
building and the formation of the new government – in their scheme, party chief
Sobotka played no role. Probably the CSSD apparatus planned to vote down Sobotka as party
leader so that Hasek might take over the party reins and
become prime minister. Despite spurious media proclamations and strained
attempts to keep the meeting secret, the information leaked out and the five
“putschists” were eventually punished by being stripped of their party
functions. Bohuslav Sobotka has withstood the attempt of a fraction of his
party colleagues to bring him down - he is now poised to become the next prime
minister.

Due to this power
struggle episode, coalition negotiations were stalled for over two weeks
after the elections. This was an opportune moment for ANO to straighten out its
party programme and its political priorities. October’s early elections caught
ANO not fully prepared to run in a race for parliamentary seats. The party (or
movement) lacked any standard party structures and a coherent political programme.
It was built more around well-known personalities than big political ideas
and proclamations – and perhaps this was its key to success. Given the various
shifts of opinion and political stances of the party and Babis himself, commentators,
analysts and even the public seemed to have a hard time making out whether ANO
is a centre-right or centre-left party.

The Christian
Democrats (KDU-CSL), with 14 seats, are likely to complete the coalition
government, which will henceforward have 111 seats in the lower house of the
parliament. Despite being a small party (in terms of current mandates), the
Christian Democrats may in the end cause more trouble for the Social Democratic
party in its attempts to put together a coalition agreement. The former
government of Petr Necas, which was forced to resign after a political
scandal, passed a law of property restitution for churches. This law gives
back land, properties and financial compensations to the churches, whose
properties were nationalized by the Communist regime after 1948. The Social
Democrats do not agree with the current version of the law and have claimed in
their pre-election statements that the party will struggle to amend it.
Clearly, the Christian Democrats stand behind the current approach to church
restitution and so far claim that they will not negotiate about amending the
law.

Another contentious
issue for coalition negotiations will be the general approach to taxation. The
Social Democratic party aims to sustain higher taxes in order to finance a
comprehensive state welfare system. ANO, profiling itself as a party of
hard-working, middle-class individualists favourable to “small business” (being
headed by a representative of “big business”) will aim to maintain lower tax
rates - especially for businesses. So far it seems that ANO and the Christian
Democrats will be pulling the Social Democrats towards the centre of the
political spectrum and thus in the outcome we are likely to see a generally
centre-left government emerge from coalition negotiations.

A third issue, which
at this point seems to be most pressing for Andrej Babis and his ANO, is the
so-called lustration process. Lustration is a process through which the
government examines the past of potential cabinet members to determine if they
have been informants or members of the communist secret police – in which case
they become blacklisted for office. President Zeman has explicitly stated that
he will not name any minister without a proper lustration certificate.
According to certain archives, Babis has indeed cooperated with the communist
secret police. Although he strictly denies this allegation, if his cooperation
with the secret police is proven true, he may find it a major obstacle
to obtaining his requested position of Minister of Finance.

Why does Babis wish to
be Minister of Finance? Right or wrong, the Berlusconi analogy brings the
notion of “conflict of interest” to mind. Andrej Babis is the owner (and
director) of Agrofert Holding – a conglomerate that operates companies in the
agricultural, chemical and food processing sector. Babis is also making inroads
into the media business – recently making the acquisition of one of the biggest
Czech media groups (MAFRA) and planning to acquire popular radio stations. A
closer contact with the state legislature can potentially carry many benefits
in helping Agrofert expand its business. It is interesting to note that in its
pre-election rhetoric ANO has often highlighted the importance of supporting
Czech food products in Czech stores and limiting the import of low-quality foods
from other countries. Although this is a generally positive strategy to support
Czech business and bring products of higher quality to Czech supermarkets, the
inherent protectionism in such a policy would undoubtedly benefit Babis’
industries.

The combination of
Babis’ business and political force arguably makes him the most powerful man in
the Czech Republic. But how will he use this “power”? Maybe he'll use it in a
positive light – doing away with corruption and non-transparent government
procurements or using his business skills to uplift the lagging Czech economy.
But there is also the “Berlusconi way” of using this power – let’s hope that The Economist used the wrong analogy.

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